Beyond Meat
- Beyond Meat announced Wednesday that it had priced its secondary public offering at $160 per share — below where the stock has been trading.
- Shares of the plant-based meat company, which closed Wednesday at $196.51, fell in early trading on Thursday.
- The offering of 3.25 million additional shares will raise capital for the company and allows some early investors to cash out on the stock’s climb since its May IPO.
- Watch Beyond Meat trade live on Markets Insider.
Shares of Beyond Meat fell more than 11% in early trading Thursday after the company announced late Wednesday that it had priced its second public offering at $160 per share, a significant discount from the stock’s Wednesday close of $196.51.
Beyond Meat is offering 250,000 shares and existing stockholders are offering an additional 3 million, a move that some viewed as a way for early investors to cash out on the stock’s meteoric rise since its May IPO. At Wednesday’s close, Beyond Meat was up 686% percent since listing as a public company.
The company announced that it expects to raise $40 million from the new shares, before the cost of underwriting, commissions, and the offering. The proceeds will be used to "increase its production and supply capabilities, to pay for marketing and promotional activities, and for general working capital purposes," the company said.
The secondary offering is expected to close around August 5, the company said, and includes a 30-day option for some underwriters to purchase up to an extra 487,500 shares at the public offering price. Beyond Meat first announced the secondary offering just after releasing its second-quarter earnings.
The company’s stock fell as much as 17% on the mixed results and the news that more shares would soon be on the market, which can devalue the price of existing shares.
Analysts who cover Beyond Meat didn’t seem fazed by the second offering and focused on the financial fundamentals of the earnings report. None of the nine analysts that cover Beyond Meat have a "buy" rating on shares, and many expect that the stock could fall further — still, a few raised their price targets on the stock.
The total 3.25 million shares is about 5% of Beyond Meat’s current outstanding shares. Insiders like CEO Ethan Brown will be offloading some of their shares — Brown will sell 39,000, Bloomberg reported. At $160 per share, he could walk away with more than $6 million dollars from the sale.
Shares of Beyond Meatare up 616% year-to-date.
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Source: Business Insider – feedback@businessinsider.com (Carmen Reinicke)